India’s residential real estate market is seeing a clear divergence in inventory trends across budget segments. According to new data released by ANAROCK Group, unsold affordable housing stock in the top seven cities declined sharply in Q1 2025, even as luxury housing inventory swelled due to heightened supply and cautious investor sentiment.
As of Q1 2025-end, the total unsold housing inventory across the top seven cities stood at approximately 5.60 lakh units, reflecting a modest 4% year-on-year decline from 5.81 lakh units in Q1 2024. Within this, the affordable housing segment—defined as units priced below ₹40 lakh—saw the most notable reduction. Inventory in this category dropped 19%, from 1,39,905 units to 1,12,744 units, driven by restricted new supply and a steady end-user demand.
The 19% drop in unsold affordable housing inventory also reflects a serious contraction in new supply—a consequence of declining developer interest in this low-margin segment. The report acknowledges that the share of affordable housing in total supply has halved since 2019, from 40% to just 16% in 2024.
City-level data reveals that Bengaluru led the affordable housing correction, recording a steep 51% decline in unsold stock—from 6,736 to 3,323 units. Chennai followed with a 44% drop, while Pune saw a 28% fall. NCR, MMR, and Kolkata registered declines of 22%, 11%, and 20%, respectively. The outlier was Hyderabad, where unsold affordable inventory increased by 9%, rising from 1,660 to 1,815 units.
In contrast, the luxury housing segment (units priced above ₹1.5 crore) saw a 24% surge in unsold inventory—from 91,125 units in Q1 2024 to 1,13,193 units a year later. ANAROCK attributes this primarily to an influx of new launches, driven by strong past performance and optimistic market sentiment in premium segments. However, the pace of absorption has lagged, resulting in inventory buildup. The report notes that even though luxury housing’s share in overall sales has grown significantly, supply appears to have outpaced realistic demand projections.
The share of luxury housing in overall sales rose from 7% in 2019 to 26% in 2024, with supply share rising from 11% to 26%. However, recent inventory buildup points to supply outpacing absorption, particularly amid global economic headwinds and selective buyer sentiment.
Among individual markets, NCR saw the most dramatic spike in unsold luxury units—up 78% year-on-year. Kolkata witnessed a 96% increase, while Bengaluru and Hyderabad recorded rises of 57% and 6%, respectively. MMR also saw a 6% uptick. Notably, only Pune and Chennai registered declines in this segment, with unsold luxury stock falling by 11% and 4%, respectively.
Mid-segment housing, priced between ₹40 lakh and ₹80 lakh, recorded a 10% decline in unsold inventory, falling from 1.75 lakh to 1.58 lakh units. Meanwhile, premium housing (₹80 lakh–₹1.5 crore) remained relatively stable, with unsold inventory hovering around 1.76 lakh units.
Notably, ANAROCK’s mapping and analysis of current inventory trends also underscores the need for a rebalanced real estate strategy—one that aligns developer interests with broader housing needs and economic realities. While the 19% drop in unsold affordable housing inventory is presented as a positive signal of demand resilience, this trend should be viewed with caution: a shrinking affordable stock may be less a sign of robust demand and more an indication of systemic neglect of a segment critical to India’s urban housing needs.
